Economics Part B

National Accounts

Expressing, in money terms, all of the business activity (income and expenditure) recorded in a country. For ease of understanding assume that all of the activity in the country is concentrated into one production entity which issues both consumer goods (bread) and investment goods (machines), and its customers consisting of three groups: households in the USA, companies in the USA (purchasing machines), and foreign residents (exports). All the financial activity of this production entity receives expression in the national accounts, being all the production expenses on one side and all the sales on the other side.

National Accounts552National Accounts